UK Government Prepares to Sell Nearly 61,200 Bitcoin Seized from Chinese Ponzi Scheme to Address Budget Deficit

The UK government currently holds a significant stockpile of nearly 61,200 Bitcoin seized in the UK from the local operations of a Chinese Ponzi scheme. Valued at approximately $7.3 billion, this stash has appreciated sharply as Bitcoin’s price climbed to between $118,000 and $123,000 in July 2025.

While the government has not yet sold these assets, it is now preparing to liquidate the Bitcoin to help plug a £20 billion budget shortfall. Chancellor Rachel Reeves is spearheading the initiative to ease fiscal pressures arising from rising borrowing costs and sluggish economic growth. The sale could potentially generate at least £5 billion (about $6.71 billion) for the Treasury.

The Crown Prosecution Service is seeking High Court approval to hold and sell the Bitcoin, with proceeds expected to be shared between law enforcement and the Treasury. The latter may retain 20–30% of the total assets, roughly £2.6 billion.

Legal and Logistical Hurdles Ahead

Victims of the 2018 Ponzi scheme are demanding restitution, complicating the legal process. Complex cases like this could take between one to four years to resolve.

Efforts to develop a centralized system for storing and liquidating seized crypto assets faced setbacks when a £40 million tender issued by the Home Office via BlueLight Commercial was terminated due to unsatisfactory bids. The government continues working to establish a secure and efficient framework for future asset seizures.

Opposition and Market Impact

The proposed Bitcoin sale has triggered political and industry debate. Prominent politician Nigel Farage has proposed creating a national Bitcoin reserve, calling Bitcoin “a strategic asset for the UK’s future.” However, the Labour government has dismissed this, citing Bitcoin’s price volatility.

Crypto advocacy groups warn that selling now could repeat mistakes made during the 1999 UK gold sale, which resulted in substantial losses when gold prices surged afterward.

Market analysts caution that liquidating such a large Bitcoin holding could cause short-term volatility, though Bitcoin’s now more mature market may absorb shocks better. This sale could set a precedent for governmental handling of seized cryptocurrencies, balancing urgent fiscal needs with long-term economic strategy.